Dr Surinder Kapoor-Chairman, Sona Koyo Steering Systems

What is your current margin and what are the steps that you are taking to improve that?
Two to three years back our margins dropped mainly because of forex losses and rise in commodity prices that was not passed on to the customer. But now those margins are coming back and we are very confident that they will continue to improve. We have taken lot of initiative to improve, whether it is through the introduction of newer and better technology, improvement in productivity or localisation of the inputs. Therefore I see margin improvement taking place first by the passing on of some of the increase in the cost to the customers and at the same time lowering the cost of production. Along with that if sales increase at a healthy rate the company will witness better cash flows.

What are the HR practices that you follow to improve your employees’ performance?
We have been following a very strong HR programme in the company for all the employee levels. We have group Kaizan activity, which we started 10-12 years ago, and all our employees are involved in one or the other group. Along with that we have TQM practices. In the area of management we have groomed new leaders under our leadership programme. We have also introduced an incentive programme for the management to achieve the set targets. I think as we go forward one of the ways by which we can retain our key employees is to incentivise them properly in tune with the company’s growth. We have defined certain core values of the company to help our employees take the right decisions. These include respect for the individual, service to the customer and excellence in the pursuit of our goals. We are very strong on PGCA i.e plan, check, and act. So if you have done something that may be a mistake you can always check those mistakes and improve for the future rather than be scared of taking decisions. Our aim is to make the Sona brand strong enough so as to attract the right talent and retain and motivate them.

What sort of technology are you using and has there been any recent upgradation?
We are using one of the best state-of-art current technologies. We have set up a subsidiary called Column Type Electric Power Steering System (C-EPS) where we own 49 per cent. They have the latest technology in the world and with the help of this we are quality suppliers to Toyota, Nissan and for some of the newer models of Maruti because all these come equipped with electronic power steering. From the productivity point of view we are involving many more partners in the company to improve our levels. We are one of the best manufacturing companies but there is always scope for improvement.

What are your capex plans?
Capex is a continuous programme for us. We are now looking for some backward integration wherein we will be putting up an aluminum die casting project because we are using this product in large amounts. Going by the demand we have to increase our capacity and therefore the scale of investment also needs to go up.

What are your plans for diversification?
We have developed a very low-cost electronic power steering system on our own. We have offered it to North America for off-highway vehicles and have got our first order with a second one in the pipeline which will be substantial since we are talking about supplying 3,50,000 steering units. We are now offering the same product to a tractor manufacturing company in India where it is going through a validation process. We have also asked some of the OEM players to test this product and the response so far has been very positive.

What are the risks and challenges that you foresee in your sector?
The real risk is how well the Indian economy will grow and the challenge lies in getting and retaining the right talent. This makes HR an important part of the growth process. Another important challenge for the automotive sector is how to make the vehicle lighter and aluminum is one of the elements that will help in achieving that objective. Therefore our venture into a die casting aluminum product is going to be important.